Last year, one of the most popular rejoinders to Gov. Gretchen Whitmer’s proposed 45-cent gas tax increase to fix the roads was just use tax revenue from marijuana sales to solve the problem instead.
Now Whitmer is set to give her State of the State address Wednesday and will outline her plan for next year’s Fiscal Year 2021 budget on Feb. 6.
She has said she’s not planning to propose another gas tax as part of her next budget, which starts Oct. 1. The GOP-led Legislature shot down her ask last year and many voters weren’t sold on it, either. But Michigan’s roads and bridges still need an annual shot in the arm of at least $2.5 billion to get back in good shape, most experts agree.
For many Michiganders, tax revenue from now-legalized marijuana still represents an attractive, painless solution for Michigan’s infrastructure woes. Social media comments to that effect have been ubiquitous for more than a year.
The Michigan Advance reported last March that pot tax revenue won’t come close to filling Michigan’s potholes.
But there have been some changes since then. As of Dec. 1, stores have been able to sell weed for adult-use for the first time. The Marijuana Regulatory Agency (MRA) reported last week that 65 licenses have been granted and it was the biggest week in sales to date.
Since Dec. 1, the MRA reports that there’s been $12.7 million in total adult-use sales. That’s generated $1.3 million in excise tax and $836,946 in sales tax for a combined $2.1 million.
So we went and checked the updated numbers on forecasted revenue for Fiscal Year 2021. And sorry to be a buzzkill, but the dream of pot for potholes remains an elusive one.
The Michigan Department of Treasury reports that excise tax revenue from marijuana was $97.5 million in FY 2020 and is estimated to be $143 million in FY 2021. Sales tax revenue from pot was $59 million in FY 2020 and is forecasted to bring in $86 million in FY 2021.
That comes out to a total of $156.5 million in tax revenue for the last fiscal year and $229 million for the upcoming FY 2021. Even if every dollar could be directed to roads, that’s only 9% of the $2.5 billion experts say Michigan’s roads need every year.
But by 2021, the state is estimated to need upwards of $3 billion for its beleaguered roads, according to a 2019 report from the nonpartisan Senate Fiscal Agency. Experts have said that roads and bridges will continue to deteriorate and cost more in the long-run without a significant investment.
We can look at Colorado, the first state to legalize weed back in 2014. The Centennial State has taken in about $1.2 billion* in tax revenue since that time.
That total is impressive, but would only approach half of what what’s needed for Michigan’s roads every year.
So will these sobering numbers finally put the clamor for cannabis to fix the roads? That’s unlikely.
Whitmer herself tried to debunk the idea while speaking at the Mackinac Policy Conference last May. She said she receives so many questions about it that she asked her team run the numbers.
“Every man, woman and child would have to smoke about $2,500 worth of marijuana per year to fix our roads,” Whitmer said, joking that “at that level, no one is going to care about the damn roads.”
An Advance reporter shared that line on Twitter, and people promptly took it as a challenge. One of the typical responses? “Don’t threaten me with a good time.”